Walker wants to build on existing deals with China

Bambino’s Baby Foods founder Zoi Maroudas speaks at a press conference June 6 in the Atwood Building in Anchorage alongside Gov. Bill Walker and other members of the state delegation that traveled to China in May to explore new trade possibilities. (Photo/Naomi Klouda/AJOC)

The Alaska trade mission to China in May is already paying off in terms of incubating opportunities, Gov. Bill Walker said June 6 in Anchorage.

Speaking alongside an entourage of Alaska business and political leaders that returned with him from China May 30, Walker said, “We’re working our way up from three deals.”

According to information presented on the trip, the U.S. currently has 1,500 trade partnerships with 63 businesses in that country.

“Alaska represents three of those,” Walker said.

Walker was referring to the potential framework of the Alaska LNG Project, Chinese Olympic athletes training in Alaska and tourism marketing for Fairbanks. The latter two agreements were struck during the May trip.

The timing of the trip also was fortuitous because it coincided with U.S. Secretary of Commerce Wilbur Ross’ visit to China and attention is on the gaping trade deficit between the two countries.

China is currently the U.S.’s largest trading partner at a total of $578.2 billion in total goods traded during 2016. The U.S. exported $115.6 billion and imported $462.6 billion from China. That makes for a trade deficit with China that is $347 billion and in the effort to correct it, there are opportunities for partnerships to form, Walker noted.

Incalculable opportunities are presented in a massive growing middle class that desires Alaska’s clean, pure food products, he said. The resource-challenged country also has need of Alaska’s rich resources, he said.

“It’s an economy of 1.4 billion people. They genuinely want trade with Alaska. We met with some companies that have more employees than we have residents, so that gives you an idea of the size of the companies that are interested in Alaska,” Walker said.

Among the people assembled to help the governor summarize the trade mission were Matanuska Susitna Borough Manager John Moosey and Assemblyman Randall Kowalke. They spoke about resources from Interior Alaska and the Valley such as timber, hay and grain that could be loaded at Point MacKenzie for shipment to China. Forest products, beetle-killed spruce logs, peonies and pork are some of the other products.

“This could open possibilities for value-added products as well, such as lumber shipments,” Kowalke said.

More trade possibilities are also on the horizon, said Stephanie Moreland, director of government relations and seafood sustainability for Trident Seafoods, another delegate on the China mission.

Trident currently offloads seafood at the Shanghai port. One of the seafood company’s China accounts is McDonald’s China, which serves Alaska’s wild pollack in its fish sandwiches.

It’s well-known that Alaska’s number one trade partner is China and that seafood composes most of that. But there’s the need to expand into sending even more seafood.

“Our vision and interest in going on the trip is that we are already doing business in China and we can grow or expand on that because of their growing middle class. It’s a new phase for us,” Moreland said.

Matson, a global shipping company, also has some China trade, but in a sea route from Long Beach, Calif., to Hong Kong, not much Alaska product get tacked on, said Lindsey Witt, manager of external affairs at Matson-Alaska.

“Right now our Alaska shipments enter through the Port at Tacoma, and there are no direct Alaska to China shipments,” she said. That could change if more Alaska products can justify a new sea route for Matson, opportunities Witt is actively exploring now.

Any trade with China by producers such as organic baby food maker Bambino’s Baby Foods and 49th State Brewing Co. will necessarily be small to start, but both have plans on the immediate horizon to grow.

Zoi Maroudas, owner and founder of Bambino’s, said she is already in talks with the China Industrial Corp., for a loan to allow her to expand. Bambino’s makes baby food from farm fresh Alaska grown products. Her products are able to “tag along” with frozen seafood supplied by Copper River Seafoods to get to Chinese markets, she said, referring to a shipping partnership she has formed with the seafood company.

“We will need new manufacturing capacity, and I am working on it now,” she said.

A whopping 18 million babies are born each year in China, a lucrative market whose parents long for Alaska’s clean air, water and soil that grows vegetables used in Bambino’s products, she said.

During Maroudas’ brief summary, the governor interjected that the baby food founder “isn’t sitting back and hoping the phone rings,” after the trade visit.

She’s already connected with companies that are bringing people this year to Alaska. They know “how large they are and how small we are. They are asking ‘how can we help you scale up’?”

49th State Brewing Co. is in the same position; it doesn’t create high volumes of micro-brew beer at the moment, said co-owner Jason Motyka. Co-owner David McCarthy said that, like the baby food, their beer achieves “authenticity” among those who tested the it on the trade trip.

Under the umbrella of their DV3 Corp., the partners also own 40 cabins at the Denali Park Salmon Bake. They were asked about winter tourism options. So far, that operation has been strictly seasonal in the summer but the partners said they are open to looking at changing that.

The governor said his own endeavors were broadly focused on seafood, tourism and establishing Alaska as a winter Olympic training venue. But he’s keen on another project as well that will have a direct impact on all interactions: creating the first direct passenger flight between Alaska and China. Talks are exploring it what it would take to get a direct route from Harbin, a northeastern Chinese city about 3,331 miles from Anchorage.

Jim Szczesniak, the manager at Ted Stevens Anchorage International Airport, was in China for business and joined with the governor’s trade mission.

He said there are plenty of flights going back and forth between Anchorage and China cities.

“Currently there are 20 flights a day carrying cargo between Hong Kong and Anchorage and another 20 a day between Shanghai and Anchorage,” Szczesniak said.

This is in addition to flights between two other cities, Guangzhou and a city south of Beijing.

“We are just a stopover in general but we do have the ability to put cargo on the aircraft to those markets and we want to serve more markets,” he said.

Seafood is already loaded on several of the daily flights, but the airport is looking at increasing the volume of those shipments.

Establishing Harbin for a new air route between the two cities makes for a good location due to “all the flights from Chinese markets that flow up into Harbin,” Szczesniak said. “They can connect to a flight from Harbin to Anchorage. That’s important because of the new narrow-bodied Boeing 737 Aircraft from Harbin to Anchorage. You’re selling 150 tickets for each flight instead of 250” for a better economy of scale.